Influencer Orchestration Network

Coronavirus Causes Brands To Pause Affiliate Programs

How the coronavirus is affecting the multi-billion dollar ecosystem of affiliate link programs and influencers who rely on them.

Coronavirus Causes Brands To Pause Affiliate Programs

In light of the coronavirus pandemic and slashes in costs, some major chains are pausing their affiliate link programs, leading influencers to figure out how to supplement their once-main source of income.

The Business of Fashion reports Ulta Beauty, Macy’s, Dillards and T.J. Maxx are among the brands to temporarily close their affiliate programs. This means influencers and media companies are cut off from the sales commissions they were receiving from posting links to products.  

Ulta stopped its affiliate program on March 22 and others followed suit: Macy’s Inc. informed participants it would pause its affiliate program on March 24, T.J. Maxx on March 26 and Dillard’s on March 30. In an email to its affiliate partners, Dillard’s said, “the decision was made due to the impact of COVID-19 and the realignment of marketing strategy.”

In 2017, $5.3 billion was spent on affiliate marketing. The figure is estimated to reach $6.8 billion this year. 

Affiliate marketing is critical for customer acquisition, with over half of marketers citing it as one of their top three revenue drivers, according to a study for Pepper Jam conducted by Forrester. In addition to putting marketers in control with performance and pricing model flexibility, affiliate programs are less susceptible to issues like fraud, brand safety and return on investment (ROI) visibility. 

With all non-essential businesses closed, millions of companies across all industries have been forced to cut costs and lay off workers. Some brands hope to bandage the situation through ecommerce sales, making now a seemingly opportune moment to leverage influencers. In fact, Pepper Jam reported an 43 percent increase in sales from affiliate links over the last two weeks of March, as BoF notes.

Still, companies can’t spare the expense of affiliate programs right now, leaving influencers with an even heavier financial burden given many of their agreements outside of affiliate links have also been paused or canceled due to the coronavirus pandemic. To get ahead of the problem, influencers should find ways to work with brands that sell essentials.

Nicole Ron, the vice president of marketing at CJ Affiliate, told BoF, “We are seeing a trend in consumers not shopping for luxury goods and spending more on creating a good environment to live in for the foreseeable future,” Ron said. “Influencers can shift to affiliate programs that are seeing growth, like productivity items, online education, and grocery goods. This is an opportunity to work with brands that aren’t having a knee-jerk reaction and provide consumers with what they need.”